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Shale gas reservoirs much higher than estimates: US EIA study

The US Energy Information Administration (EIA) has estimated shale gas at 586 trillion cubic feet (Tcf) against its 2011 estimates of 52 Tcf for Pakistan. According to latest EIA study, the shale gas/oil reservoirs are much higher in Pakistan relative to what was estimated in the earlier studies/reports. The study estimates a total of 1,170 Tcf of risked shale gas in-place for India/Pakistan, 584 Tcf in India and 586 Tcf in Pakistan.

The risked technically recoverable shale gas resource is estimated at 201 Tcf, with 96 Tcf in India and 105 Tcf in Pakistan. In addition, the study estimates risked shale oil in-place for India/Pakistan of 314 billion barrels, with 87 billion barrels in India and 227 billion barrels in Pakistan. The risked technically recoverable shale oil resource is estimated at 12.9 billion barrels for these two countries, with 3.8 billion barrels for India and 9.1 billion barrels for Pakistan.

The EIA study has also revised shale gas global reservoir from 6,622 Tcf in 2011 to 7,299 Tcf in 2013, which indicates a 10 percent increase. The top six countries in terms of recoverable shale gas resources are US with estimated shale gas reservoirs at 1,161 Tcf, followed by China 1,115 Tcf, Argentina 802 Tcf, Algeria 707 Tcf, Canada 573 Tcf and Mexico 545 Tcf. The top five countries in terms of recoverable shale oil - Russia, the US, China, Argentina and Libya - account for 63 percent of the world''s total.

ARI in compiling its "World Shale Gas and Shale Oil Resource Assessment" surveyed in-place and technically recoverable shale gas and shale oil in 95 shale basins and 137 shale formations in 41 countries and also included its other assessments of US shale gas and oil reserves from other research.

In Pakistan, the shale gas and oil assessment is restricted to the aerially extensive Central and Southern Indus basins, referred to as the Lower Indus Basin. The shales in this basin have sourced the significant volumes of conventional oil and gas discovered and produced in Pakistan. However, to date, no shale specific exploration has been publicly reported for Pakistan.

Within the overall prospective area of the Lower Indus Basin, the Sembar Shale has risked shale gas in-place of 531 Tcf, with 101 Tcf as the risked, technically recoverable shale gas resource. In addition, the Sembar Shale has 145 billion barrels of shale oil in-place, with 5.8 billion barrels as the risked, technically recoverable shale oil resource. Within its 26,780-mi2 wet gas and condensate prospective area, the Ranikot Shale has resource concentrations of 17 Bcf/mi2 of wet gas and 25 million barrels/mi2 of shale oil/condensate. Within this prospective area of the Lower Indus Basin, the Ranikot Shale has 55 Tcf of risked shale gas in-place and 82 billion barrels of risked shale oil in-place. The risked, technically recoverable shale resources of the Ranikot Shale are 4 Tcf of wet shale gas and 3.3 billion barrels of shale oil/condensate. The shale gas exploration is highly technical and costly, therefore, in order to encourage its exploration, pilot projects are needed as well as huge foreign investment.

An official of the Petroleum Ministry when contacted said that keeping in view the huge shale gas/oil reservoirs in the country, the government in 2012 approved a new exploration policy, with improved incentives, as compared to the 2009 policy. Pakistan has offered higher prices for shale and tight gas to exploration companies, it is estimated that Pakistan would pay a maximum of $6.50/MMBtu.

Giving salient features of the expected shale gas policy the source said: "Exploration and Production (E&P) companies will be offered 40-50 percent higher prices for the extracted gas compared with the $4.26/mmbtu price announced in Exploration and Production Policy 2009. Companies which succeed in recovering gas from tight fields within two years would get 50 percent hike over the 2009 price and, if it takes more time, they will get only 40 percent hike on the 2009 price. As an added incentive, the leases for the fields will now be for 40 years, instead of 30 in the 2009 policy."

Extracting of shale and tight was a real challenge, since the cost and effort involved in extracting tight gas was quite different from conventional methods, but it had been commercially extracted in many parts of the world now and there were some tried and tested methods, he maintained.

The first ever tight gas Sales and Purchase Agreement was signed on November 13, 2012 in Islamabad for first production from a tight gas reservoir in Pakistan from Kirthar Block in Dadu, Sindh. The Kirthar Block is jointly owned by Polish Oil and Gas Company (PGNiG) and Pakistan Petroleum Limited (70 percent) and PPL (30 percent). If exploration and extraction is on schedule, SSGC will receive 30mmcfd gas into its system through two Kirthar Block wells.

Apart from this, PPL in collaboration with ENI is set to start for the first time drilling of exploratory well in Sindh''s deep sea in 2014. In this regard, around seven exploratory wells, eight appraisal wells, and 19 development wells have been planned for discovering shale and tight gas in Sindh in the next five years. Pakistan is particularly heavily dependent on natural gas for its energy needs. At present actual demand for gas is around 8 billion cubic feet (BCFD) per day, while managed demand is hovering around 6 BCFD against total supply of 4.3 BCF.

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